Harry Canterville [Ted Wass], who has spent most of his life in Cleveland, Ohio, returns with his new wife Lucy Canterville [Andrea Marcovicci] and his daughter from a previous marriage, Jennifer "Jenny" Canterville [Alyssa Milano], to claim Canterville Castle in a small English village. They soon discover the castle is haunted by the ghost of a disgraced ancestor, Sir Simon de Canterville [John Gielgud]. Despite the eccentric relatives who will not enter the castle and the gloomy predictions of Mrs. Umney [Lila Kaye], Harry and Lucy do not believe that there actually is a ghost. They assume they are being hoaxed by wires, and Harry plans to stay for at least three months before taking full possession, with the aim of selling the castle to a property developer who wants to turn it into a hotel.
Meanwhile, Jennifer slips to the attic at night in search of the ghost. Her biological mother died four years earlier, and she has never learned to accept Lucy as her stepmother despite Lucy's attempts to befriend her. She contacts Sir Simon, who initially tries to scare her off, as he is used to doing. Jennifer ignores her fear and asks Sir Simon if he will try to scare off Lucy. Sir Simon, surprised by Jennifer, befriends her for being the first person not to be frightened by him. He tells her that he has not slept in over 300 years and is extremely tired.
The next morning, Harry climbs on the roof of the castle in search of wires, and when he falls, he is rescued by Sir Simon. Sir Simon also tries to scare off guests at a dinner party, and Lucy begins to see the evidence of a real haunting—she experiences mirror visions, icy fingers on her shoulder when she is alone, and voices that she cannot explain. Harry and Lucy start to believe in the ghost when Sir Simon appears to disrupt the dinner party and terrorize the guests.
Through Paul Blaine [Spencer Chandler], one of Jennifer's classmates, they hear a rumour that Sir Simon killed his wife Eleanor [Celia Breckon], though the truth is that she accidentally fell down the stairs while trying to strike him. They proceed to the graveyard, where Sir Simon's tombstone has no date of death. Sir Simon himself materializes to scare Paul, and after a period of tension between Jennifer and him, he explains that he is doomed to remain on the estate after his wife's death, whom she cursed him for causing by failing to maintain a bridge that led to their daughter's death. Jennifer decides to act, and she pleads with the Angel of Death to release him. Despite the risks, she persuades the entity to grant Sir Simon freedom, and he is released from the curse.
